Investors have had to contend with a lot of ups and downs in the economy over the last few years. Even though a bull market is now well underway, recent market volatility has some investors worrying about a more prolonged correction. That may or may not happen, and it doesn't mean there aren't great businesses still worth investing in.
All markets can present opportunities if you are a long-term investor, particularly if you're only committing your capital (let's say it's $1,000 in this case) to quality stocks and plan to hold them for years rather than days or weeks. If you focus on stocks that align with your overall portfolio goals, financial perspective, and investment thesis, you can build a basket of stocks that will help that $1,000 investment grow into something far more sizeable.
The real challenge, of course, is finding the right stocks. To help get you started, here are two unstoppable stocks to invest $1,000 in.
1. Eli Lilly
Pharmaceutical giant Eli Lilly (NYSE: LLY) has been going from strength to strength lately, with its robust portfolio of medicines with broad, growing addressable market opportunities. More attention is focused on Eli Lilly recently because of the success of its weight loss and diabetes drugs, marketed as Zepbound and Mounjaro, respectively. These drugs contain the same active ingredient, tirzepatide. Both drugs have already achieved blockbuster status.
Zepbound was approved for chronic weight management by the U.S. Food and Drug Administration in November 2023, while Mounjaro was approved by the agency back in 2022 for adults with type 2 diabetes. In the first half of 2024 alone, Mounjaro brought in total revenue just shy of $5 billion, while Zepbound delivered about $1.8 billion in revenue. That's a notable slice of the roughly $21 billion in overall revenue Eli Lilly reported. It's an eye-popping 31% increase from the same stretch in 2023.
These drugs should lead to billions in added revenue annually for Eli Lilly over the next decade, and the company is actively working to broaden the potential base of patients who might benefit from a tirzepatide-related prescription. For example, the drug is being studied for uses that include cutting the risk of progression to type 2 diabetes among prediabetics. Eli Lilly also just made Zepbound available in single-dose vials through its own direct-to-consumer platform. Through Eli Lilly's platform, patients can access certain medicines that have been prescribed to them and have them delivered directly with self-pay options.
With this latest initiative, Eli Lilly hopes to ensure that those who aren't eligible through savings cards, insurance, or employer coverage aren't excluded from the care they require. Case in point: A four-week supply of a 2.5 mg dose of Zepbound will cost a patient $399, less than half of the list price of other glucagon-like peptide-1 (GLP-1) medicines on the market.
Beyond weight loss and diabetes, Eli Lilly has other mainstays in its portfolio to rely on like cancer drug Verzenio as well as diabetes medications Jardiance and Humalog. Sales of these three drugs alone rose 42%, 17%, and 30% year over year, respectively, in the first half of 2024, totaling about $5 billion. Eli Lilly is also insanely profitable, bringing in about $5.2 billion in profits in the first six months of 2024, up 68% from one year ago.
Eli Lilly is acquisitive, too, and just purchased a company called Morphic Holding. The acquisition expands the healthcare giant's immunology drug franchise and specifically brings new potential gastroenterology therapies into the fold, including an experimental oral drug for inflammatory bowel disease (IBD). Eli Lilly looks like a great stock to buy and hold for the long run, while its top-notch track record of paying and raising its dividend is the cherry on top. With a forward dividend rate of $5.20, income-seeking investors might find these are all green flags that deliver a compelling buying proposition for the healthcare stock.
2. Chewy
Online pet supply specialist Chewy (NYSE: CHWY) has had its ups and downs as a stock, and it is currently in an upswing with shares rising about 16% so far in 2024. While some investors worry about the company's path forward after a volatile period during the worst of the pandemic, others are encouraged by the more reasonable (but sustainable) growth story emerging in 2024. Outsized pandemic-era levels of growth shouldn't be expected, but this company is still growing with real potential for further expansion.
For most people, pets are a part of the family. Spending on pets might change when economic times are tough, but the essential costs remain. In 2023, non-discretionary categories like consumables and healthcare spending accounted for 85% of Chewy's net sales. But Chewy doesn't just sell pet food and toys. It also has its own online pet telehealth service, a selection of pet health insurance plans, an online pet pharmacy that delivers both compounded and regular prescriptions, its own line of pet supplements, and more.
Chewy recently launched brick-and-mortar veterinary clinics and animal hospitals as part of its expanding network of services. It even has its own sponsored ads initiative to help generate revenue, where select pet brands can pay to market their products and services to Chewy's shoppers on its flagship e-commerce platform.
In addition to its minimal reliance on discretionary pet spending, Chewy also derives most of its net sales from recurring rather than one-time sales. It does so through its Autoship program, which allows pet owners to set up recurring deliveries of their favorite products. Over three-quarters of Chewy's net sales come from its Autoship program. Looking back over the trailing 12 months, Chewy brought in net income of about $84 million on revenue of $11 billion.
While more bumps may lie ahead for Chewy as it adjusts to a new era of growth, the resilience and diversification of its underlying business model can bode well for long-term shareholders.
Should you invest $1,000 in Eli Lilly right now?
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Rachel Warren has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chewy. The Motley Fool has a disclosure policy.
2 Unstoppable Growth Stocks to Buy Right Now for Less Than $1,000 was originally published by The Motley Fool